and the
Citizens Economic Research Foundation

Barbara's Column
February #3

Healthcare Reform:
More questions than answers from Beacon Hill
by Barbara Anderson

The Eagle-Tribune
Sunday, February 19, 2006

The Massachusetts House and Senate are having a difficult time agreeing on the terms of a health-care reform bill.

The federal government has given us a deadline to improve health insurance coverage or lose $385 million in federal Medicaid money. Gov. Mitt Romney created a proposal to expand the number of insured here, the House and Senate passed different versions of the bill, and they are all now trying to work out their differences.

I'm not overly concerned about the $385 million. Since the Legislature refuses to do the income-tax rollback, none of that federal money will be mine, anyhow. So I figure the commonwealth's loss is the federal deficit's gain to the benefit of my grandchildren.

I've been supportive of health-care reform primarily because the present situation is unfair and untenable: Those employers and citizens who pay increasingly high premiums for their health insurance must also, through the state's mismanaged "free care" pool, pay for treatment for the uninsured. This treatment often takes place in emergency rooms instead of being part of the preventative medicine program that comes with insurance.

As David King, director of communications at North Shore Medical Center, explains, "We are already paying for those without insurance, giving the most amount of money for the least amount of care."

He was part of a panel I heard at a Salem Chamber of Commerce forum this week discussing the various "health-care reform" proposals. Other panelists were Dr. Jon Kingsdale, senior vice president at Tufts Health Plan, Michael Widmer of the so-called Massachusetts Taxpayers Foundation (MTF), and two local state representatives, John Keenan, D-Salem, and Mary Grant, D-Beverly.

Though I went hoping to find a sensible solution, I admit to certain prejudices toward the participants. Tufts HMO is Citizens for Limited Taxation's insurance company, and while premiums are painful for a little taxpayer group, we get excellent service. Since I hate driving into Boston, I'm a North Shore Medical system customer. But MTF is my longtime adversary on tax issues, and I don't have much confidence in the Legislature in general.

However, MTF for a change shared my concern about higher taxes in this case the House version's job-killing new payroll tax.

However, MTF's alternate plan is a state subsidy for more coverage, phasing in $200 million a year for the next three years for a total of $600 million. Romney has already placed that first $200 million in his new budget.

Let's use the traditional rule of thumb for any new government program: It will cost three times what they say it will. Or how about the new Big Dig rule of thumb: It will cost seven times the original estimate.

All the panelists seemed to agree on the problems: high costs for ever-advancing treatments; high consumer expectations; the fact that the uninsured are presently treated in the most expensive, least effective emergency room environment; and inadequate reimbursement for the hospitals that provide it.

It wasn't until the legislators spoke, though, that I decided we might be better off just doing nothing that maybe we should celebrate the gridlock on the bills.

One person in the audience asked if this issue might not be too big for a state to handle on its own, suggesting that a solution must come at the national level.

Grant had already made her pitch for "a single-payer system" like those in Europe and Canada. Keenan argued that the states are supposed to experiment and come up with solutions that can then be expanded nationally.

Wonderful. Let's "experiment" with Massachusetts. Then when our economy is a train wreck and half the population has died prematurely from government-run health care, the rest of the states will know what not to do.

Just kidding. No one at this point is seriously arguing for state-run health care here. But if Massachusetts expands coverage, won't this encourage people from other states, and those here illegally from other countries to come here for the subsidized insurance? And with more state involvement, can we really expect better management than we are currently getting from the "free care" system that our inspector general has criticized?

King from North Shore Medical mentioned the debate between personal responsibility and a government role, between employer and employee funding. At the federal level, my preferred solution would let individuals buy their own insurance with pretax dollars and carry it from job to job. But at our state level, the phrase "personal responsibility" doesn't usually compute. This is the state that presently charges self-payers in nursing homes $10.99 a day (that's over $4,000 a year) as a "fee" to support Medicaid patients.

That's right, we tax the sick elderly citizens who planned ahead to be personally responsible and use them to rip off the federal government and its taxpayers. As the self-payers use up their own funds faster, they move onto the Medicaid system, half of which is reimbursed by the feds. Doesn't this contradict the federal goal of fewer people on Medicaid, which is the reason for the present health-care debate?

My final thoughts for now on the subject: First, do no harm. Then repeal the nursing home tax. Then let's talk some more.

Barbara Anderson is executive director of Citizens for Limited Taxation. Her syndicated columns appear weekly in the Salem News, Newburyport Times, Gloucester Times, (Lawrence) Eagle-Tribune, and Lowell Sun; bi-weekly in the Tinytown Gazette; and occasionally in the Providence Journal and other newspapers.